In conditions of limited logistics resources, the tools of the Export Credit Agency (ECA) will stimulate exports of goods with high added value. This was stated by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko during the forum dedicated to financial instruments for supporting exports in Ukraine, Export Credit Forum-2022.

According to Yuliia Svyrydenko, the Government is betting on the development of export sectors of the economy. After all, in the current situation when some of its export routes are blocked due to the war, Ukraine needs to increase the depth of its product processing.

“In conditions of limited logistics resources, we must increase exports of non-raw materials. Processed products cost two to three times more than raw materials. In addition, such exports provide an increase in jobs within the country.

Together with the National Bank of Ukraine and the Parliament, we managed to promptly work out a mechanism that allowed us to restart the Export Credit Agency of Ukraine established by the state to stimulate the large-scale expansion of Ukrainian exports of non-raw materials to world markets as an effective tool for supporting the economy during the war. We have expanded the list of goods whose exports can be supported by ECA – from 16% of commodity exports by product range to 41%,” Yuliia Svyrydenko said.

According to the Minister of Economy of Ukraine, the ECA insurance policy was included in the list of acceptable security for banks on loans issued. The “Affordable Loans 5-7-9%” business support program was expanded to include loans issued to exporters for the implementation of foreign economic agreements.

“All this enabled to support new exports for UAH 3.06 billion during these 10 months of war through the ECA tool. Let me remind you that we are talking about the exports of goods with a high added value, the production of which creates jobs and brings revenues not only to the state but also to local budgets.

We can change the structure of our exports. We are already doing that. In order to increase export volumes by UAH 100 billion and create 26,000 jobs within 5 years through ECA tools. To this end, we will need new solutions and new tools,” Yuliia Svyrydenko said.

According to her, the Government plans to transform Ukraine’s transitional economy into a developed economy within just 10 years. For this purpose, the Ukrainian GDP should grow from USD 4,000 per capita per annum to an amount three times larger – USD 12,000.

For this purpose, the Government will deregulate, attract investments and support exports of non-raw materials.

The following persons also took part in the event:

• Kateryna Rozhkova, First Deputy Governor of the National Bank of Ukraine,

• Christopher Abrams, Director, Office of Economic Growth, USAID Mission in Ukraine,
• Ruslan Hashev, Acting Head of the Board of Export Credit Agency PJSC.

Head of ECA Ruslan Hashev noted that 8 out of 10 exporters had applied to the Export Credit Agency for financing before the full-scale war. Businesses had a product ready for the world market, had a customer, but did not have the money to execute an export agreement without 100% advance payment. In the conditions of the war, this problem became even more acute.

“For banks, the risks of such lending have increased significantly. And they should have included this risk in the cost of the loan, which would automatically make the Ukrainian exporter’s products uncompetitive on the world market. The agency’s insurance policy, which this year began to be recognized by banks as acceptable security, solved this problem. During the war, the Export Credit Agency became a bridge between banks and exporters. And we do not plan to stop there,” Ruslan Hashev said.

For reference

Export Credit Agency PJSC is an agency duly authorized by the government, whose purpose is to support and stimulate the large-scale expansion of exports of goods (works, services) of Ukrainian origin.

It was founded in 2018. The sole founder and shareholder of ECA is the state represented by the Cabinet of Ministers of Ukraine. Corporate rights owned by the state in the authorized capital of ECA are managed by the Cabinet of Ministers of Ukraine through the Ministry of Economy of Ukraine.

ECA protects Ukrainian exporters from the risk of non-payments and financial losses associated with the execution of foreign exchange contracts, and also provides a wide range of services that allow Ukrainian exporters to strengthen their credit policy and efficiently manage their financial flows.

As of 6 December 2022, ECA’s insurance liability is UAH 235,498 million (including UAH 220.9 million for the insurance of partner banks), the amount of signed credit agreements has almost reached UAH 260 million, and the volume of supported exports has exceeded UAH 3 billion.